Overview
Location: London
Asset type: Commercial
Summary: Three days before closing, a London real estate acquisition was at risk due to an unexpected Energy Performance Certificate (EPC) rating. What appeared to require £1M in upgrades ultimately required no capital expenditure—just a more accurate assessment of the building’s performance.
What is an Energy Performance Certificate (EPC)?
An EPC, or Energy Performance Certificate, rates a building’s energy efficiency and is required for commercial real estate transactions across Europe. Ratings run on a scale from A, the most efficient, to G, the least efficient and methodologies can vary widely across countries.
Challenge
Three days before closing on a London asset, a client learned that the building’s EPC rating was determined to be a C, while the transaction required a B to proceed, putting the deal at risk.
The original assessor indicated that achieving a B rating would require approximately £1 million in capital upgrades. With closing imminent, this projected cost—based on the initial EPC assessment—put both the deal timeline and financial viability of the acquisition at risk.
Before committing, the client reached out to GreenGen for a second opinion and to determine the most cost-effective path to compliance in order to proceed with the transaction.
Our Approach
GreenGen reviewed the underlying assessment and identified a potential issue. Our team was on-site the next morning to evaluate further.
GreenGen determined that the original EPC relied on “model default” efficiency values rather than the actual performance of the building’s boiler and other key equipment. While on-site we were able to capture actual operational data from the equipment and use this verified data to resubmit the asset.
Results
Once the verified data was incorporated, GreenGen was able to submit the asset for an EPC B rating in time for the deal to close on schedule.
- No capital investment was required
- The asset achieved an EPC B rating, which was required to proceed with the transaction
- The deal closed on schedule
Key Takeaways for Investors and Asset Managers
EPC methodologies vary widely across Europe, and as ratings shift from compliance paperwork to deal-critical inputs, that inconsistency is starting to carry real financial weight. In this case, the difference between a stalled deal and a clean close wasn’t £1M in capex, it was a second look at the data.
If an EPC rating is holding up a deal, it may be worth a second look.
Interested in working with the GreenGen team? Reach out to us!